The government has ordered the Oil and Natural Gas Corporation (ONGC) to pay a record Rs. 56,384 crore in subsidy to help State-owned fuel retailers cover part of the losses they incurred on diesel and cooking fuel in 2013—14.
The Oil Ministry on May 21 asked ONGC and State oil and gas producers Oil India (OIL) and GAIL to shell out Rs. 67,021.14 crore to cover for about 48 per cent of over Rs. 1,40,000 crore loss retailers Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) incurred on selling diesel, LPG and kerosene below cost in 2013—14.
The government will chip in Rs. 70,772 crore by way of cash subsidy, official sources said.
For 2013—14, ONGC’s subsidy share has been fixed at Rs. 56,384.29 crore, 14 per cent higher than Rs. 49,421 crore subsidy payout in the 2012—13 fiscal, they said.
OIL has been asked to pay 11 per cent more subsidy at Rs. 8,736.85 crore while GAIL’s subsidy output has been reduced by 30 per cent to Rs. 1,900 crore because it no longer gets subsidised feedstock for manufacturing LPG.
Sources said the government had for the first three quarters paid the fuel retailers Rs. 35,772 crore in cash subsidy and will pay another Rs. 35,000 crore for the fourth quarter ended March 31, 2014.
Of the additional subsidy, IOC will get Rs. 18,504.62 crore, HPCL Rs. 6,938.46 crore and BPCL Rs. 9,556.92 crore. For the fiscal 2013—14, IOC will get Rs. 37,182.27 crore in cash subsidy, HPCL Rs. 15,215.45 crore and BPCL Rs. 18,374.28 crore.
ONGC says its 2012—13 net profit should have been Rs. 49,339 crore and not Rs. 20,926 crore it reported, had it not paid fuel subsidies.
Sources said out of the upstream share of Rs. 67,021.14 crore, IOC will get Rs. 34,673.59 crore, BPCL Rs. 15,576.78 crore and HPCL Rs. 16,770.77 crore.
The government subsidy and upstream support should help fuel retailers report healthy profits for 2013—14 when they report earnings next year. IOC and BPCL are scheduled to report their fourth quarter and 2013—14 earnings on May 29, while HPCL will do so on May 28.
Gas utility GAIL will announce its earnings on May 26 and ONGC on May 29.
